Bank of Japan Slightly Expands Allowable Fluctuation Range for Long-Term Interest Rates

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The Bank of Japan (BOJ), Japan's central bank, announced on the 19th that it will slightly expand the allowable fluctuation range for long-term interest rates, according to Kyodo News.

According to the report, the BOJ decided to revise its policy to reduce the side effects of large-scale monetary easing at the monetary policy meeting chaired by Governor Haruhiko Kuroda on the same day.

While maintaining the existing monetary easing framework, including negative interest rates and short- and long-term interest rate control, the BOJ will allow the long-term interest rate target to fluctuate around 0% within a range of approximately ±0.25%.

Additionally, the principle of limiting annual purchases of exchange-traded funds (ETFs), which have been used as a means to stimulate the stock market, to about 6 trillion yen was removed.

However, the upper limit for ETF purchases set at 12 trillion yen per year remains in place.

This is interpreted as a message indicating that the BOJ will withhold purchases during rising stock market phases and actively intervene during market downturns.

This content was produced with the assistance of AI translation services.